At Zubr Capital, a private equity firm focused on fast-growing companies in the TMT sector, we watch these outliers closely. They’re often the early signals of deeper changes shaping the next investment cycle.

Here’s what stood out, and why it might matter as autumn approaches.

A polarised July: mega-rounds and seed, but little in between

July’s European tech funding told a polarised story. Two mega-rounds dominated the month: Sweden’s Lovable closed a €172.8 million Series A for its AI-powered app platform, while UK-based Xelix secured €138.3 million in Series B for its AI-driven financial automation.

After that, the gap was immediate and sharp: the next biggest round, Lightyear’s €20 million Series B (UK/Estonia, investment platform), then a cascade of early-stage checks from €18 million down to €2.8 million – mostly in emerging segments like EV charging (Cariqa, €4 million, Germany), hiring tech (Kiku, €4 million, Denmark), and underwater robotics (SR Robotics, €8.4 million, Poland).

What’s missing is the entire “middle” tier – those €30–80 million growth-stage rounds that typically define a healthy market pipeline. Instead, capital clustered at the extremes: big bets on future unicorns, lots of experimentation at seed, but not much in between.

For investors, it was a month of extremes: either going big on future champions or taking chances on new names. Steady growth stories? Hardly on the radar. For founders, that means moving up from seed will take more hustle, with fewer VCs ready to back the middle stage and more need to get creative about where the next check comes from.

Sector split: AI gets the big checks, the rest stay early

The headline deals of July (already noted for their scale) share one common thread: AI sits at the core. But step outside this spotlight, and the story changes. All other sectors – mobility, robotics, green tech, pharma e-commerce – were left to early-stage rounds, rarely breaking the €10 million mark.

This sector split isn’t business as usual. For now, if you want access to major capital, you’d better have “AI” at the heart of your story. Everyone else is left competing for early-stage tickets. Whether this is just a summer quirk or a sign of a new “AI-or-bust” era, non-AI founders may need to look further afield for their next growth round.

July grant launches: public funding fills the middle

With growth-stage VC rounds thin on the ground this July, public funding stepped into the spotlight. The Women TechEU programme launched its fourth call, distributing €75,000 non-dilutive grants to 160 women-led deeptech startups across Europe and Horizon countries (including the UK). Cascade funding calls remained active, targeting startups, SMEs, and researchers in next-gen internet, robotics, agricultural drones, XR healthcare, and ICT standardisation, with typical grant sizes from €40,000 to €250,000 per project. The ECAS grant-making call continued to support digital inclusion and civic engagement, awarding up to €56,000 per project, and the Digital Europe Programme kept up its flow of innovation and tech adoption grants.

For many early and mid-stage founders, these programmes are more than just an add-on – they’re now a primary route to survival and R&D. As venture investors either go all-in or sit out the middle, grant funding isn’t just cushioning the market, it’s shaping the paths startups can take.

While venture bets on the new, M&A doubles down on infrastructure

As venture money in July flocked to AI plays and early-stage experiments, the biggest strategic bets moved elsewhere – straight into Europe’s core technology infrastructure.

NXP’s $630 million acquisition of Austria’s TTTech Auto brings software-defined vehicle expertise and 1,100 engineers into its orbit, reinforcing Europe’s place in next-gen mobility. Meanwhile, SES and Intelsat’s completed merger combined satellite assets to supercharge government and enterprise connectivity across Europe and beyond.

While the venture scene is searching for the next breakout, these M&A moves show where long-term value is being built: not at the visible edge, but deep in the backbone that powers the entire digital economy. For founders and investors alike, it’s a reminder – sometimes the most transformative deals are those shaping what happens under the surface.

Compliance becomes the gatekeeper: EU regulation reshapes investment risk

July saw Europe’s regulators accelerate the shift from policy talk to enforceable standards – across AI, data governance, and digital platforms.

The European Commission released the GPAI Code of Practice and detailed guidelines under the AI Act, setting new transparency and data obligations for general-purpose AI models, soon to be mandatory.

July 14 saw final DSA guidelines published, demanding stricter protections for minors on all digital platforms accessible to children – raising the bar for privacy, security, and design.

The EU launched new processes to open up cross-border data flows, with updated adequacy decisions and roadmaps for lawful access and retention.

For investors, this means compliance is no longer a box to tick at exit, but a daily reality shaping which companies can scale, attract capital, or even survive.

The upshot? Investment risk in European tech is now as much about regulatory readiness as about product or team. Those able to adapt fastest (especially in AI, B2C digital, and SaaS) will find both the capital and market access that slower peers may start losing in the months leading up to year-end.

Conclusion

July’s market anomalies aren’t yet trends, but they’re early signals – hints that old playbooks may be fading, and new rules are in the making. For investors, this is the season to read between the lines: the sharpest moves are often where no one is looking, and compliance is becoming the real edge.

At Zubr Capital, we watch the undercurrents as closely as the headlines. As autumn approaches, the smartest bets may go to those who adapt first – and spot opportunity where others only see noise.

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